RReeccoommmmeennddaattiioonnss ttoo tthhee EEuurrooppeeaann CCoouunncciill

EEuurrooppee aanndd tthhee gglloobbaall iinnffoorrmmaattiioonn ssoocciieettyy

MMeemmbbeerrss ooff tthhee HHiigghh--LLeevveell GGrroouupp oonn tthhee IInnffoorrmmaattiioonn SSoocciieettyy

Martin Bangemann Enrico Cabral da Fonseca

Peter Davis Carlo de Benedetti

Pehr Gyllenhammar Lothar Hunsel

Pierre Lescure Pascual Maragall

Gaston Thorn Candido Velazquez-Gastelu

Peter Bonfield Etienne Davignon

Jean-Marie Descarpentries Brian Ennis Hans-Olaf Henkel

Anders Knutsen Constantin Makropoulos

Romano Prodi Jan Timmer

Heinrich von Pierer

In its Brussels meeting of December 1993, the European Council requested that a report

be prepared for its meeting on 24 - 25 June 1994 in Corfu by a group of prominentpersons on the specific measures to be taken into consideration by the Community and

the Member States for the infrastructures in the sphere of information.

On the basis of this report, the Council will adopt an operational programme defining

precise procedures for action and the necessary means.

Brussels, 26 May 1994

- 2 -

RECOMMENDATIONS TO THE EUROPEAN COUNCIL ....................................1

Europe and the global information society.............................................................................................1Members of the High-Level Group on the Information Society ..............................................................1

An Action Plan - summary of recommendations....................................................................................3

Chapter 1.................................................................................................................................................3The information society - new ways of living and working together.......................................................3

Chapter 2...............................................................................................................................................10A market-driven revolution.................................................................................................................10

Chapter 3...............................................................................................................................................15Completing the agenda .......................................................................................................................15

Chapter 4...............................................................................................................................................19The building blocks of the information society ....................................................................................19

Application One - TELEWORKING...................................................................................................23

Application Two - DISTANCE LEARNING.......................................................................................23

Application Three - A NETWORK FOR UNIVERSITIES AND RESEARCH CENTRES ..................24

Application Four - TELEMATIC SERVICES FOR SMEs ..................................................................24

Application Five - ROAD TRAFFIC MANAGEMENT ......................................................................25

Application Six - AIR TRAFFIC CONTROL......................................................................................25Application Seven - HEALTHCARE NETWORKS............................................................................26

Application Eight - ELECTRONIC TENDERING ..............................................................................26

Application Nine - TRANS-EUROPEAN PUBLIC ADMINISTRATION NETWORK .......................27

Application Ten - CITY INFORMATION HIGHWAYS.....................................................................27

Chapter 5...............................................................................................................................................28Financing the information society - a task for the private sector...........................................................28

Chapter 6...............................................................................................................................................29Follow-up...........................................................................................................................................29

An Action Plan - summary of recommendations..................................................................................29

Regulatory Framework .......................................................................................................................29

Completing the agenda .......................................................................................................................30Building blocks ..................................................................................................................................31

Financing ...........................................................................................................................................32

Follow-up...........................................................................................................................................32

- 3 -

AAnn AAccttiioonn PPllaann -- ssuummmmaarryy ooff rreeccoommmmeennddaattiioonnss

This Report urges the European Union to put its faith in market mechanisms as themotive power to carry us into the Information Age.

This means that actions must be taken at the European level and by Member States tostrike down entrenched positions which put Europe at a competitive disadvantage:

� it means fostering an entrepreneurial mentality to enable the emergence of newdynamic sectors of the economy

� it means developing a common regulatory approach to bring forth a competitive,Europe-wide, market for information services

� it does NOT mean more public money, financial assistance, subsidies, dirigisme, orprotectionism.

In addition to its specific recommendations, the Group proposes an Action Plan ofconcrete initiatives based on a partnership between the private and public sectors to carry

Europe forward into the information society.

CChhaapptteerr 11

TThhee iinnffoorrmmaattiioonn ssoocciieettyy -- nneeww wwaayyss ooff lliivviinngg aanndd wwoorrkkiinngg ttooggeetthheerr

A revolutionary challenge to decision makers

Throughout the world, information and communications technologies are generating anew industrial revolution already as significant and far-reaching as those of the past.

It is a revolution based on information, itself the expression of human knowledge.Technological progress now enables us to process, store, retrieve and communicate

information in whatever form it may take - oral, written or visual - unconstrained bydistance, time and volume.

This revolution adds huge new capacities to human intelligence and constitutes a resourcewhich changes the way we work together and the way we live together.

This revolution adds huge new capacities to human intelligence and.... changes the waywe work together and the way we live together.

Europe is already participating in this revolution, but with an approach which is still toofragmentary and which could reduce expected benefits. An information society is a

means to achieve so many of the Union's objectives. We have to get it right, and get itright now.

Partnership for jobs

Europe's ability to participate, to adapt and to exploit the new technologies and theopportunities they create, will require partnership between individuals, employers, unions

and governments dedicated to managing change. If we manage the changes beforeus withdetermination and understanding of the social implications, we shall all gain in the long

run.

- 4 -

Our work has been sustained by the conviction expressed in the Commission's White

Paper, Growth, Competitiveness and Employment, that "...the enormous potential fornew services relating to production, consumption, culture and leisure activities will create

large numbers of new jobs...". Yet nothing will happen automatically. We have to act toensure that these jobs are created here, and soon. And that means public and private

sectors acting together.

If we seize the opportunity

All revolutions generate uncertainty, discontinuity - and opportunity. Today's is no

exception. How we respond, how we turn current opportunities into real benefits, willdepend on how quickly we can enter the European information society.

In the face of quite remarkable technological developments and economic opportunities,all the leading global industrial players are reassessing their strategies and their options.

A common creation or a still fragmented Europe?

The first countries to enter the information society will reap the greatest rewards. Theywill set the agenda for all who must follow. By contrast, countries which temporise, or

favour half-hearted solutions, could, in less than a decade, face disastrousdeclines ininvestment and a squeeze on jobs.

Given its history, we can be sure that Europe will take the opportunity. It will create theinformation society. The only question is whether this will be a strategic creation for the

whole Union, or a more fragmented and much less effective amalgam of individualinitiatives by Member States, with repercussions on every policy area, from the single

market to cohesion.

The only question is whether this will be a strategic creation for the whole Union, or a

more fragmented and much less effective amalgam of individual initiatives by MemberStates.

What we can expect for...

� Europe's citizens and consumers:

A more caring European society with a significantly higher quality of life and a wider

choice of services and entertainment.

� the content creators:

New ways to exercise their creativity as the information society calls into being newproducts and services.

� Europe's regions:

New opportunities to express their cultural traditions and identities and, for those

standing on the geographical periphery of the Union, a minimising of distance andremoteness.

� governments and administrations:

- 5 -

More efficient, transparent and responsive public services, closer to the citizen and at

lower cost.

� European business and small and medium sized enterprises:

More effective management and organisation, access to training and other services, datalinks with customers and suppliers generating greater competitiveness.

� Europe's telecommunications operators:

The capacity to supply an ever wider range of new high value-added services.

� the equipment and software suppliers; the computer and consumer electronicsindustries:

New and strongly-growing markets for their products at home and abroad.

The social challenge

The widespread availability of new information tools and services will present fresh

opportunities to build a more equal and balanced society and to foster individualaccomplishment. The information society has the potential to improve the qua-lity of life

of Europe's citizens, the efficiency of our social and economic organisation and toreinforce cohesion.

The information society has the potential to improve the quality of life of Europe'scitizens, the efficiency of our social and economic organisation and to reinforce cohesion.

The information revolution prompts profound changes in the way we view our societiesand also in their organisation and structure.

This presents us with a major challenge: either we grasp the opportunities before us andmaster the risks, or we bow to them, togetherwith all the uncertainties this may entail.

The main risk lies in the creation of a two-tier society of have and have-nots, in whichonly a part of the population has access to thenew technology, is comfortable using it and

can fully enjoy its benefits. There is a danger that individuals will reject the newinformation culture and its instruments.

Such a risk is inherent in the process of structural change. We must confront it byconvincing people that the new technologies hold out the prospect of a major step

forward towards a European society less subject to such constraints as rigidity, inertia andcompartmentalisation. By pooling resources that have traditionally been separate, and

indeed distant, the information infrastructure unleashes unlimited potential for acquiringknowledge, innovation and creativity.

Mastering risks, maximising benefits

Thus, we have to find ways to master the risks and maximise the benefits. This placesresponsibilities on public authorities to establish safeguards and to ensure the cohesion of

the new society. Fair access to the infrastructure will have to be guaranteed to all, as willprovision of universal service, the definition of which must evolve in line with the

technology.

- 6 -

A great deal of effort must be put into securing widespread public acceptance and actual

use of the new technology. Preparing Europeans for the advent of the information societyis a priority task. Education, training and promotion will necessarily playa central role.

The White Paper's goal of giving European citizens the right to life-long education andtraining here finds its full justification. In order best to raise awareness, regional and local

initiatives - whether public or private - should be encouraged.

Preparing Europeans for the advent of the information society is a priority task.

Education, training and promotion will necessarily play a central role.

The arrival of the information society comes in tandem with changes in labour legislation

and the rise of new professions and skills.

Continuous dialogue between the social partners will be extremely important if we are to

anticipate and to manage the imminent transformation of the work place. This concertedeffort should reflect new relationships at the work place induced by the changing

environment.

More detailed consideration of these issues exceeds the scope of this Report. The Group

wishes to stress that Europe is bound to change, and that it is in our interest to seize thisopportunity. The information infrastructure can prove an extraordinary instrument for

serving the people of Europe and improving our society by fully reflecting the originaland often unique values which underpin and give meaning to our lives.

At the end of the day, the added value brought by the new tools, and the overall successof the information society, will depend on the input made by our people, both

individually and in working together. We are convinced that Europeans will meet thischallenge.

Time to press on

Why the urgency? Because competitive suppliers of networks and services from outsideEurope are increasingly active in our markets.

They are convinced, as we must be, that if Europe arrives late our suppliers oftechnologies and services will lack the commercial muscle to win a share of the

enormous global opportunities which lie ahead. Our companies will migrate to moreattractive locations to do business. Our export markets will evaporate. We have to prove

them wrong.

Tide waits for no man, and this is a revolutionary tide, sweeping through economic and

social life. We must press on. At least we do not have the usual European worry aboutcatching up. In some areas we are well placed, in others we do need to do more - but this

is also true for the rest of the world's trading nations.

The importance of the sector was evident by its prominence during the Uruguay Round of

GATT negotiations. This importance is destined to increase.

We should not be sceptical of our possibilities for success. We have major technological,

entrepreneurial and creative capabilities.

However, the diffusion of information is still too restricted andtoo expensive. This can be

tackled quickly through regulatory reforms.

- 7 -

Public awareness of the technologies has hitherto been too limited. This must change.

Political attention is too intermittent. The private sector expects a new signal.

Political attention is too intermittent. The private sector expects a new signal.

An Action Plan

This Report outlines our vision of the information society and the benefits it will deliverto our citizens and to economic operators. It points to areas in which action is needed

now so we can start out on the market-led passage to the new age, as well as to the agentswhich can drive us there.

As requested in the Council's mandate, we advocate an Action Plan based on specificinitiatives involving partnerships linking public and private sectors. Their objective is to

stimulate markets so that they can rapidly attain critical mass.

In this sector, private investment will be the driving force. Monopolistic, anticompetitive

environments are the real roadblocks to such involvement. The situation here iscompletely different from that of other infrastructural investments where public funds are

still crucial, such as transport.

This sector is in rapid evolution. The market will drive, it will decide winners and losers.

Given the power and pervasiveness of the technology, this market is global.

The market will drive ... the prime task of government is to safeguard competitive

forces....

The prime task of government is to safeguard competitive forces and ensure a strong and

lasting political welcome for the information society, so that demand-pull can financegrowth, here as elsewhere.

By sharing our vision, and appreciating its urgency, Europe's decision-makers can makethe prospects for our renewed economic and social development infinitely brighter.

New markets in Europe's information society

Information has a multiplier effect which will energise every economic sector. Withmarket driven tariffs, there will be a vast array of novel information services and

applications:

� from high cost services, whose premium prices are justified by the value of benefits

delivered, to budget price products designed for mass consumption;

� from services to the business community, which can be tailored to the needs of a

specific customer, to standardised packages which will sell in high volumes at lowprices;

� from services and applications which employ existing infrastructure, peripherals andequipment (telephone and cable TV networks, broadcasting systems, personal

computers, CD players and ordinary TV sets) to those which will be carried via newtechnologies, such as integrated broadband, as these are installed.

- 8 -

Markets for business

Large and small companies and professional users are already leading the way in

exploiting the new technologies to raise the efficiency of their management andproduction systems. And more radical changes to business organisation and methods are

on the way.

Business awareness of these trends and opportunities is still lower in Europe compared to

the US. Companies are not yet fully exploiting the potential for internal reorganisationand for adapting relationships with suppliers, contractors and customers. We have a lot of

pent up demand to fill.

Business awareness of these trends and opportunities is still lower in Europe compared

to the US.

In the business markets, teleconferencing is one good example of a business application

worth promoting, while much effort is also being dedicated worldwide to the perfectionof telecommerce and electronic document interchange (EDI).

Both offer such cost and time advantages over traditional methods that, once applied,electronic procedures rapidly become the preferred way of doing business. According to

some estimates, handling an electronic requisition is one tenth the cost of handling itspaper equivalent, while an electronic mail (e-mail) message is faster, more reliable and

can save 95% of the cost of a fax.

Electronic payments systems are already ushering in the cashless society in some parts of

Europe. We have a sizeable lead over the rest of the world in smart card technology andapplications. This is an area of global market potential.

Markets for small and medium sized enterprises

Though Europe's 12 million SMEs are rightly regarded as the backbone of the Europeaneconomy, they do need to manage both information and managerial resources better.

They need to be linked to easy access, cost-effective networks providing information onproduction and market openings. The competitiveness of the whole industrial fabric

would be sharpened if their relationships with large companies were based on the newtechnologies.

Networked relationships with universities, research institutes and laboratories wouldboost their prospects even more by helping to remedy chronic R&D deficiencies.

Networking will also diminish the isolation of SMEs in Europe's less advantaged regions,helping them to upgrade their products and find wider markets.

Markets for consumers

These are expected to be richly populated with services, from home banking andteleshopping to a near-limitless choice of entertainment on demand.

In Europe, like the United States, mass consumer markets may emerge as one of theprincipal driving forces for the information society. American experience already shows

that the development markets encounters a number of obstacles and uncertainties.

- 9 -

Given the initial high cost of new pay-per-view entertainment services, and of the related

equipment, as well as the high cost of bringing fibre optics to the home, a large massconsumer market will develop more easily if entertainment services are part of a broader

package. This could also include information data, cultural programming, sportingevents, as well as telemarketing and teleshopping. Pay-per-view for on-line services, as

well as advertising, will both be necessary as a source of revenue. To some extent,existing satellite and telephone infrastructure can help to serve the consumer market in

the initial phase.

At the moment, this market is still only embryonic in Europe and is likely to take longer

to grow than in the United States. There, more than 60% of households are tapped bycable TV systems which could also carry text and data services. In Europe, only 25% are

similarly equipped, and this figure masks great differences between countries, e.g.Belgium (92%) and Greece (1-2%).

Another statistic: in the United States there are 34 PCs per hundred citizens. TheEuropean figure overall is 10 per hundred, though the UK, for instance, at 22 per

hundred, is closer to the US level of computer penetration.

Lack of available information services and poor computer awareness could therefore

prove handicaps in Europe. Telecommunication networks are, however, comparable insize and cover, but lag behind in terms of utilisation. These networks, therefore, can act

as the basic port of access for the initial services, but stimulation of user applications isstill going to be necessary.

Such structural weaknesses need not halt progress. Europe's technological success withCD-ROM and CD-I could be the basis for a raft of non-networked applications and

services during the early formative years of the information society. These services ondisk have considerable export potential if Europe's audio-visual industry succeeds in

countering current US dominance in titles.

In terms of the market, France's Minitel network already offers an encouraging example

that European consumers are prepared to buy information and transaction services onscreen, if the access price is right. It reaches nearly 30 million private and business

subscribers through six million small terminals and carries about 15,000 differentservices. Minitel has created many new jobs, directly and indirectly, through boosting

business efficiency and competitiveness.

In the UK, the success of the Community-sponsored Homestead programme, using CD-I,

is indicative, as is the highly successful launch of (an American) dedicated cableteleshopping channel.

Meanwhile in the US, where the consumer market is more advanced, video-on-demandand home shopping could emerge as the most popular services.

Audio-visual markets

Our biggest structural problem is the financial and organisational weakness of theEuropean programme industry. Despite the enormous richness of the European heritage,

and the potential of our creators, most of the programmes and most of the stocks ofacquired rights are not in European hands. A fast growing European home market can

- 10 -

provide European industry with an opportunity to develop a home base and to exploit

increased possibilities for exports.

Linguistic fragmentation of the market has long been seen as a disadvantage for Europe's

entertainment and audio-visual industry, especially with English having an overwhelmingdominance in the global market - a reflection of the US lead in production and,

importantly, in distribution. This lead, which starts with cinema and continueswithtelevision, is likely to be extended to the new audio-visual areas. However, once

products can be easily accessible to consumers, there will be more opportunities forexpression of the multiplicity of cultures and languages in which Europe abounds.

...once products can be easily accessible to consumers, there will be more opportunitiesfor expression of the multiplicity of cultures and languages in which Europe abounds.

Europe's audio-visual industry is also burdened with regulations. Some of these will soonbe rendered obsolete by the development of new technologies, hampering the

development of a dynamic European market.

As a first step to stimulating debate on the new challenges, the Commission has produced

a Green Paper on the audio-visual industry.

CChhaapptteerr 22

AA mmaarrkkeett--ddrriivveenn rreevvoolluuttiioonn

A break with the past

The Group is convinced that technological progress and the evolution of the market meanthat Europe must make a break from policies based on principles which belong to a time

before the advent of the information revolution.

The key issue for the emergence of new markets is the need for a new regulatory

environment allowing full competition. This will be a prerequisite for mobilising theprivate capital necessary for innovation, growth and development.

In order to function properly, the new market requires that all actors are equipped toparticipate successfully, or at least that they do not start with significant handicaps. All

should be able to operate according to clearrules, within a single, fair and competitiveframework.

The Group recommends Member States to accelerate the ongoing process ofliberalisation of the telecom sector by:

� opening up to competition infrastructures and services still in the monopoly area

� removing non-commercial political burdens and budgetary constraints imposed on

telecommunications operators

� setting clear timetables and dead lines for the implementation of practical measures to

achieve these goals

- 11 -

Ending monopoly

This is as true for the telecommunications operators (TOs) as for others. It is now

generally recognised as both necessary and desirable that the political burdens on themshould be removed, their tariffs adjusted and a proper regulatory framework created.

Even the operations of those TOs whose status has already evolved over recent years arenot fully in line.

It is possible to end monopoly. In future, all licensed public operators should assume theirshare of public service responsibilities (e.g. universal service obligation and the provision

of equal access to networks and services).

A competitive environment requires the following:

� TOs relieved of political constraints, such as:

subsidising public functions;

external R&D activities;

contributions to land planning and management objectives;

the burden to carry alone the responsibility of universal service;

� a proper regulatory framework designed to achieve:

market regulation to enable and to protect competition;

a predictable environment to make possible strategic planning and investment;

� adjustment of tariffs.

Enabling the market

The Group recommends the establishment at the European level of an authority whose

terms of reference will require a prompt attention.

In order for the market to operate successfully, the Group has identified the following

objectives and recommendations:

Evolution in the regulatory domain

Identify and establish the minimum of regulation needed, at the European level, to ensure

the rapid emergence of efficient European information infrastructures and services. Theterms of reference of the authority which will be responsible for the enforcement of this

regulation is a question that will require a prompt attention.

The urgency of the matter is in direct relation to the prevailing market conditions. A clear

requirement exists for the new "rules of the game" to be outlined as soon as possible. Themarket place will then be in a position to anticipate the forthcoming framework, and the

opportunity will exist for those wishing to move rapidly to benefit from these efforts.

The authority will need to address:

� the regulation of those operations which, because of their Community-wide nature,need to be addressed at the European level,

- 12 -

� such as licensing, network interconnection when and where necessary, management

of shared scarce resources (e.g. radio-frequency allocation, subscriber numbering andadvice to Member States regulatory authorities on general issues.

� a single regulatory framework valid for all operators, which would imply liftingunequal conditions for market access. It would also ensure that conditions for

network access and service use be guided by the principles of transparency and non-discrimination, complemented by practical rules for dispute resolution and speedy

remedy against abuse dominance.

Interconnection and interoperability

Two features are essential to the deployment of the information infrastructure needed by

the information society: one is a seamless interconnection of networks and the other thatthe services and applications which build on them should be able to work together

(interoperability).

In the past the political will to interconnect national telephone networks resulted in

hundreds of millions of subscriber connections world-wide. Similar politicaldetermination and corresponding effort are required to set up the considerably more

complex information infrastructures.

Interconnection of networks and interoperability of services and applications are

recommended as primary Union objectives.

The challenge is to provide interconnections for a variety of networking conditions (e.g.

fixed and new type of networks, such as mobile and satellite) and basic services (e.g.Integrated Service Digital Network - ISDN). Currently, the positions of monopoly

operators are being eroded in these fast-developing areas.

Joint commercial decisions must be taken by the TOs without delay to ensure rapid

extension of European basic services beyond telephony. This would improve theircompetitive position vis-à-vis non-European players in their own markets.

The European information society is emerging from many different angles. Europeaninfrastructure is evolving into an ever tighter web of networks, generic services,

applications and equipment, the development, distribution and maintenance of whichoccupy a multitude of sources worldwide.

In an efficient and expanding information infrastructure, such components should worktogether.

Assembling the various pieces of this complex system to meet the challenge ofinteroperability would be impossible without clear conventions. Standards are such

conventions.

Open systems standards will play an essential role in building a European information

infrastructure.

Standards institutes have an honourable record in producing European standards, but the

standardisation process as it stands today raises a number of concerns about fitness forpurpose, lack of interoperability, and priority setting that is not sufficiently market

driven.

- 13 -

Action is required at three different levels:

� at the level of operators, public procurement and investors:

following the successful example of GSM digital mobile telephony, market players

(industry, TOs, users) could establish Memoranda of Understanding (MoU) to set thespecifications requirements for specific application objectives. These requirements would

then provide input to the competent standardisation body. This type of mechanism wouldadequately respond to market needs.

Operators, public procurement and investors should adopt unified open standard-basedsolutions for the provision and the procurement of information services in order to

achieve global interoperability.

� at the level of the European standards bodies:

These should be encouraged to establish priorities based on market requirements and toidentify publicly available specifications, originated by the market, which are suitable for

rapid transformation into standards (e.g. through fast track procedures).

� at the level of the Union:

European standardisation policy should be reviewed in the light of the above. When themarket is not providing acceptable technical solutions to achieve one of the European

Union's objectives, a mechanism should be sought to select or generate suitabletechnologies.

World-wide interoperability should be promoted and secured.

The Group recommends a review of the European standardisation process in order to

increase its speed and responsiveness to markets.

Urgent action to adjust tariffs

Reduction in international, long distance and leased line tariffs will trigger expansion in

the usage of infrastructures, generating additional revenues, and simultaneously giving amajor boost to generic services and innovative applications

Reduction in international, long distance and leased line tariffs will trigger expansion inthe usage of infrastructures, generating additional revenues, and simultaneously giving a

major boost to generic services and innovative applications

In most cases, the current unsatisfactory tariff situation results from the TOs' monopoly

status and a variety of associated political constraints.

The introduction of competitive provision of services and infrastructures implies that TOs

would be able to adjust their tariffs in line with market conditions. Rebalancing ofinternational and long-distance versus local tariffs is a critical step in this process.

The Group recommends as a matter of urgency the adjustment of international, longdistance and leased line tariffs to bring these down into line with rates practised in other

advanced industrialised regions. Adjustment of tariffs should be accompanied by the fairsharing of public service obligations among operators.

Two elements should accompany the process:

- 14 -

TOs freed from politically imposed budgetary constraints;

a fair and equitable sharing of the burden of providing universal services between alllicensed operators.

Fostering critical mass

Market segments based on the new information infrastructures cannot provide anadequate return on investment without a certain level of demand. In most cases,

competition alone will not provide such a mass, or it will provide it too slowly.

A number of measures should be taken in order to reach this goal:

� co-operation should be encouraged among competitors so as to create the requiredsize and momentum in particular market areas. The already mentioned GSM MoU is

an archetypal example of how positive this approach can be.

� agreement between public administrations to achieve common requirements and

specifications, and a commitment to use these in procurement at national andEuropean levels.

� extensive promotion and use of existing and forthcoming European networks andservices.

� awareness campaigns, notably directed at public administrations, SMEs andeducational institutions.

It is recommended to promote public awareness. Particular attention should be paid to thesmall and medium sized business sector, public administrations and the younger

generation.

In addition, everyone involved in building up the information society must be in a

position to adapt strategies and forge alliances to enable them to contribute to, and benefitfrom, overall growth in the field.

Secure the world-wide dimension

The Group recommends that the openness of the European market should find itscounterpart in markets and networks of other regions of the world. It is of paramount

importance for Europe that adequate steps are taken to guarantee equal access.

Since information infrastructures are borderless in an open market environment, the

information society has an essentially global dimension.

The actions advocated in this Report will lead to a truly open environment, where access

is provided to all players. This openness should find its counterpart in markets andnetworks of other regions of the world. It is obviously of paramount importance for

Europe that adequate steps are taken to guarantee equal access

Towards a positive outcome

The responses outlined above to the challenges posed by the deployment of the

information society will be positive for all involved in its creation and use.

- 15 -

Telecommunications, cable and satellite operators will be in a position to take full

advantage of market opportunities as they see fit, and to expand their market share.

The service provider and content industries will be able to offer innovative products at

attractive prices. Citizens and users will benefit from a broader range of competingservices. Telecommunication equipment and software suppliers will see an expanding

market.

Those countries that have already opted for faster liberalisation, are experiencing rapidly

expanding domestic markets that provide new opportunities for TOs, service providersand industry. For the others, the price to pay for a slower pace of liberalisation will be a

stiffer challenge from more dynamic foreign competitors and a smaller domestic market.Time is running out. If action is not accelerated, many benefits will arrive late, or never.

It is an essential recommendation of the Group that governments support acceleratedliberalisation by drawing up clear timetables and deadlines with practical measures to

obtain this goal.

In this context, the 1993 Council Resolution remains a useful point of reference. Even

before the specified dates, governments should take best advantage of its builtinflexibility to seize the opportunities offered by a burgeoning competitive market. They

should speed up the opening to competition of infrastructures and of those services thatare still in the monopoly area, as well as remove political burdens imposed on their

national TOs.

In this context, the 1993 Council Resolution remains a useful point of reference. Even

before the specified dates, governments should take best advantage of its built-inflexibility to seize the opportunities offered by a burgeoning competitive market. They

should speed up the opening to competition of infrastructures and of those services thatare still in the monopoly area, as well as remove political burdens imposed on their

national TOs.

CChhaapptteerr 33

CCoommpplleettiinngg tthhee aaggeennddaa

Several policy issues have to be faced in parallel with actions needed to create an open,competitive and market-driven information society. Disparate national regulatory

reactions carry a very real threat of fragmentation to the internal market.

Here there are two different sets of issues and problems: one relating to the business

community, the other more to individuals and the information society, with specificreference to privacy.

As we move into the information society, a regulatory response in key areas likeintellectual property, privacy and media ownership is required at the European level in

order to maximise the benefits of the single market for all players. Only the scale of theinternal market is sufficient to justify and attract the required financing of high

performance trans-European information networks.

- 16 -

Therefore, applying single market principle of freedom of movement of all goods and

services, to the benefit of Europeans everywhere, must be our key objective.

The information society is global. The Group thus recommends that Union action should

aim to establish a common and agreed regulatory framework for the protection ofintellectual property rights, privacy and security of information, in Europe and, where

appropriate internationally.

Protection of intellectual property rights (IPR)

While there is a great deal of information that is in the public domain, there is also

information containing added value which is proprietary and needs protection via theenforcement of intellectual property rights. IPRs are an important factor in developing a

competitive European industry, both in the area of information technology and moregenerally across a wide variety of industrial and cultural sectors.

Creativity and innovation are two of the Union's most important assets. Their protectionmust continue to be a high priority, on the basis of balanced solutions which do not

impede the operation of market forces.

The global nature of the services that will be provided through the information networks

means that the Union will have to be party to international action to protect intellectualproperty. Otherwise, serious difficulties will arise if regulatory systems in different areas

of the world are operating on incompatible principles which permit circumvention orcreate jurisdictional uncertainties.

The Group believes that intellectual property protection must rise to the new challengesof globalisation and multimedia and must continue to have a high priority at both

European and international levels.

In this global information market place, common rules must be agreed and enforced by

everyone. Europe has a vested interest in ensuring that protection of IPRs receives fullattention and that a high level of protection is maintained. Moreover, as the technology

advances, regular world-wide consultation with all interested parties, both the suppliersand the user communities, will be required.

Initiatives already under way within Europe, such as the proposed Directive on the legalprotection of electronic databases, should be completed as a matter of priority.

Meanwhile, in order to stimulate the development of new multimedia products andservices, existing legal regimes - both national and Union - will have to be re-examined

to see whether they are appropriate to the new information society. Where necessary,adjustments will have to be made.

In particular, the ease with which digitised information can be transmitted, manipulatedand adapted requires solutions protecting the content providers. But, at the same time,

flexibility and efficiency in obtaining authorisation for the exploitation ofworks will be aprerequisite for a dynamic European multimedia industry.

- 17 -

Privacy

The demand for the protection of privacy will rightly increase as the potential of the new

technologies to secure (even across national frontiers) and to manipulate detailedinformation on individuals from data, voice and image sources is realised. Without the

legal security of a Union-wide approach, lack of consumer confidence will certainlyundermine rapid development of the information society.

Europe leads the world in the protection of the fundamental rights of the individual withregard to personal data processing. The application ofnew technologies potentially affects

highly sensitive areas such as those dealing with the images of individuals, theircommunication, their movements and their behaviour. With this in mind, it is quite

possible that most Member States will react to these developments by adoptingprotection, including trans-frontier control of new technologies and services.

Disparities in the level of protection of such privacy rules create the risk that nationalauthorities might restrict free circulation of a wide range of new services between

Member States in order to protect personal data.

The Group believes that without the legal security of a Union-wide approach, lack of

consumer confidence will certainly undermine the rapid development of the informationsociety. Given the importance andsensitivity of the privacy issue, a fast decision from

Member States is required on the Commission's proposed Directive setting out generalprinciples of data protection.

Electronic protection (encryption), legal protection and security

Encryption is going to become increasingly important in assuring the development of thepay services. Encryption will ensure that only those who pay will receive the service. It

will also provide protection against personal data falling into the public domain.

International harmonisation would assist the market if it were to lead to a standard system

of scrambling. Conditional access should ensure fair and open competition in the interestsof consumers and service providers.

Encryption is particularly important for telecommerce, which requires absoluteguarantees in areas such as the integrity of signatures and text, irrevocable time and date

stamping and international legal recognition.

However, the increased use of encryption and the development of a single encryption

system will increase the returns from hacking into the system to avoid payment orprivacy restrictions. Without a legal framework that would secure service providers

against piracy of their encryption system, there is the risk that they will not get involvedin the development of these new services.

The Group recommends acceleration of work at European level on electronic and legalprotection as well as security.

On the other hand, governments may need powers to override encryption for the purposesof fighting against crime and protecting national security.

An answer given at a national level to this and to the hacking issue will inevitably proveto be insufficient because communications reach beyond national frontiers and because

- 18 -

the principles of the internal market prohibit measures such as import bans on decoding

equipment.

Therefore, a solution at the European level is needed which provides a global answer to

the problem of protection of encrypted signals and security. Based on the principles ofthe internal market it would create parity of conditions for the protection ofencrypted

services as well as the legal framework for the development of these new services.

Media ownership

In addition to ownership controls to prevent monopoly abuse, most countries have rules

on media and cross media ownership to preserve pluralism and freedom of expression.

In practice, these rules are a patchwork of inconsistency which tend to distort and

fragment the market. They impede companies from taking advantage of the opportunitiesoffered by the internal market, especially in multimedia, and could put them in jeopardy

vis-à-vis non-European competitors.

In current circumstances, there is a risk of each Member State adopting purely national

legislation in response to the new problems and challenges posed by the informationsociety. Urgent attention has to be given to the question of how we can avoid such an

undermining of the internal market and ensure effective rules which protect pluralism andcompetition.

Rules at the European level are going to be crucial, given the universality of theinformation society and its inherently transborder nature. The Union will have to lead the

way in heading off deeper regulatory disparity. In so doing it will reinforce the legalsecurity that is vital for the global competitiveness of Europe's media industry.

The Group believes that urgent attention should be given to the question of how we canavoid divergent national legislation on media ownership undermining the internal market.

Effective rules must emerge to protect pluralism and competition.

The role of competition policy

Competition policy is a key element in Union strategy. It is especially important for

consolidating the single market and for attracting the private capital necessary for thegrowth of the trans-European information infrastructure.

Areas of the information society are beset by intense globalising pressures. These affectboth European and non-European companies operating inside the Union. If appropriate,

the notion of a global, rather than a Union-wide, market should now be used inassessingEuropean competition issues such as market power, joint ventures and alliances.

Competition Policy is a key element in Europe's strategy. The Group recommends thatthe application of competition rules should reflect the reality of the newly emerging

global markets and the speed of change in the environment.

The aim should not be to freeze any set of regulations, but rather to establish procedures

and policies through which the exploding dynamism of the sector can be translated intogreater opportunities for wealth and job creation.

- 19 -

Like other commercial players, companies involved in the supply of technologies and

services must be in a position to adapt their strategies and to forge alliances to enablethem to contribute to, and to benefit from, overall growth in the sector in the framework

of competition policy.

Technology

The technological base in Europe today is sufficient to launch the applications proposed

in this reports without delay. They must focus on realistic systems on a sufficient scale toexplore the value of the services offered to the user, and to evaluate the economic

feasibility of the new information systems.

However, new technologies do still have to be developed for their full-scale introduction

following these demonstrations. In particular, the usability and cost-effectiveness of thesystems must be improved, and the consequences of mass use further investigated.

The research programmes of the Union and of Member States, in particular the FourthFramework Programme, should be implemented in such a way as to take into account

market requirements. Technical targets and the timing of projects must be defined withappropriate user involvement.

CChhaapptteerr 44

TThhee bbuuiillddiinngg bblloocckkss ooff tthhee iinnffoorrmmaattiioonn ssoocciieettyy

Communications systems combined with advanced information technologies are keys to

the information society. The constraints of time and distance have been removed bynetworks (e.g. telephone, satellites, cables) which carry the information, basic services

(e.g. electronic mail, interactive video) which allow people to use the networks andapplications (e.g. distance learning, teleworking) which offer dedicated solutions for user

groups.

The opportunity for the Union - strengthening its existing networks and accelerating the

creationof new ones ISDN: a first step The traditional telephone network is changing itscharacter. Having been built as a universal carrier for voice, it now has to meet the

communication requirements of a modern economy going far beyond simple telephonecalls.

One important development is the Integrated Service Digital Network ISDN. This offersthe opportunity to send not only voice, but also data and even moving images through

telephone lines.

ISDN is particularly suited for the communications needs of small and medium sized

enterprises. It permits, for example, direct PC to PC communication, for instant, low-costtransmission of documents. Teleworking using ISDN services can be attractive to a wide

range of businesses. ISDN is also an ideal support for distance learning.

EURO-ISDN, based on common standards, started at the end of 1993. A number of

European countries have a leading position which should be exploited. The Grouprecommends priority extension of the availability of EURO-ISDN, in line with current

Commission proposals, and reductions in tariffs to foster the market.

- 20 -

Broadband: the path to multimedia

ISDN is only the first step. New multimedia services, for instance high quality video

communications, require even more performance. ISDN is showing the way, and the nexttechnological wave aims for themultimedia-world. This is integrated broadband

communications, providing an opportunity to combine all media in a flexible way. Thelead technology to implement this is called Asynchronous Transfer Mode (ATM).

European industry and telecoms operators are at the forefront of these technologicaldevelopments and should reap the benefits. Europe needs to develop an ATM broadband

infrastructure as the backbone of the information society. Multimedia services offeredthrough these networks will support the work and leisure activities of all our citizens.

In many European countries, highly developed broadband distribution already exists inthe form of cable and satellite networks, or it is being deployed. Application of currently

available sophisticated digital techniques, such as picture compression and digital signaltransmission, will easily enable these networks to fulfill mainstream demands for

interactive individual information and leisure uses.

The present situation is mainly characterised by national and regional initiatives. The first

trials of transnational networks have taken place only recently.

The Group recommends that the Council supports the implementation of the European

broadband infrastructure and secure its interconnectivity with the whole of Europeantelecom, cable television and satellite networks.

A European Broadband Steering Committee involving all relevant actors should be set upin order to develop a common vision and to monitor and facilitate the realisation of the

overall concept through, in particular, demonstrations and, choice and definition ofstandards.

Mobile communication: a growing field

Mobile communication is growing at breathtaking speed. The number of mobiletelephone subscribers has doubled over the past three years to 8 million. At current

growth rates of 30-40%, the Union will soon have 40 million users.

Europe is becoming an important leader in mobile communications through adoption

around the world of its standards for digital communications. In particular, GSM is anexcellent demonstration of how a common Europe-wide public/private initiative can be

successfully transformed into a market driven, job creating operation.

In Germany, the country where GSM is currently having most success, about 30,000 new

jobs have been created. On similar assumptions, Europe-wide introduction on the samescale would generate more than 100,000 new jobs.

Satellites: widening the scope of communications

Satellites are mainly used for television broadcasting, Earth observation andtelecommunications. The crucial advantage of satellites is their wide geographical

coverage without the need for expensive terrestrial networks. Satellites have manyadvantages for providing rural and remote areas with advanced communications.

- 21 -

Full exploitation of satellites can only be achieved by a new phase in the Union's satellite

policy. The objective should be to develop trans-European networks.

With regard to mobile and satellite communications, the Group recommends:

� a reduction in tariffs for mobile communications;

� promotion of GSM, in Europe and internationally;

� the establishment of a regulatory ramework for satellite communications;

� urging the European satellite industry to develop common priority projects and to

participate actively in

� the development of worldwide systems.

New basic services are needed

New basic services such as e-mail, file transfer and interactive multimedia are needed.The necessary technology is available. New networks are developing, such as ISDN,

eliminating the present limitations of the telephone network.

Two basic elements are needed for such services: unambiguous standards and critical

mass. The attraction of a telecommunications service depends directly on the number ofother compatible users. Thus, a new service cannot really take off until a certain number

of customers has subscribed to the service. Once this critical mass has been achieved,growth rates can increase dramatically, as in the case of INTERNET.

INTERNET is based on a world-wide network of networks that is not centrally planned.In fact, nobody owns INTERNET. There are now some 20 million users in more than 100

countries. The network offers electronic mail, discussion fora, information exchange andmuch more. INTERNET is so big, and growing so fast, that it cannot be ignored.

Nevertheless, it has flaws, notably serious security problems. Rather than remainingmerely clients, we in Europe should consider following the evolution of INTERNET

closely, playing a more active role in the development of interlinkages.

The Group recommends urgent and coherent action at both European and Member State

levels to promote the provision and widespread use of standard, trans-European basicservices, including electronic mail, file transfer and video services.

The Commission is recommended to initiate the creation of a "European Basic ServicesForum" to accelerate the availability of unified standards for basic services. Significant

advantages for the whole economy could be realised quite quickly through extension ofEurope-wide compatible basic services.

Blazing the trail - ten applications to launch the information society

Today technology is in search of applications. At the same time, societies are searchingfor solutions to problems based on intelligent information.

Tariff reductions will facilitate the creation of new applications and so overcome thepresent low rate of capacity utilisation. Voice lines operate, for instance, an average of 20

minutes in 24 hours, while some value-added network services are only working at 20%of capacity.

- 22 -

However, confident as we are of the necessity to liberate market forces, heightened

competition will not by itself produce -or produce too slowly- the critical mass which hasthe power to drive investment in new networks and services.

We can only create a virtuous circle of supply and demand if a significant number ofmarket testing applications based on information networks and services can be launched

across Europe to create critical mass.

We can only create a virtuous circle of supply and demand if a significant number of

market testing applications based on information networks and services can be launchedacross Europe to create critical mass.

Demonstration Function

Initiatives taking the form of experimental applications are the most effective means ofaddressing the slow take-off of demand and supply. They have a demonstration function

which would help to promote theirwider use; they provide an early test bed for suppliersto fine-tune applications to customer requirements, and they can stimulate advanced

users, still relatively few in number in Europe as compared to the US.

It is necessary to involve local, metropolitan and regional administrations in their

development. Cities can have an extremely important role in generating early demandand also in promoting an awareness among their citizens of the advantages of the

newservices. In certain cases, local administrations could demonstrate the benefits byassuming the role of the first mass user.

To be truly effective, such applications need to be launched in real commercialenvironments, preferably on a large scale. These initiatives are not pilot projects in the

traditional sense. The first objective is to test the value to the user, and the economicfeasibility of the information systems.

As the examples in the following pages demonstrate, it is possible to identify initiativeswhich will rapidly develop new applications and markets, while also impacting positively

on the creation of new jobs and businesses.

The private sector is ready to embark on the initiatives needed.

Priority applications can be divided in two main blocks, according to final users:

� the personal home market (interactiv and transaction applications related to

teleshopping, telebanking, entertainment, leisure)

� business and social applications.

Priority applications should also contribute to a number of macro-economic objectives:

� strengthening industrial competitive ness and promoting the creation of new jobs

� promoting new forms of work organisation

� improving quality of life and quality of the environment

� responding to social needs and raising the efficiency and cost-effectiveness of publicservices.

- 23 -

AApppplliiccaattiioonn OOnnee -- TTEELLEEWWOORRKKIINNGG

More jobs, new jobs, for a mobile society

What should be done? Promote teleworking in homes and satellite offices so that

commuters no longer need to travel long distances to work. From there, they can connectelectronically to whatever professional environment they need, irrespective of the system

in use.

Who will do it? If the telecom operators make available the required networks at

competitive prices, the private sector will set up new service companies to supplyteleworking support.

Who gains? Companies (both large and SMEs) and public administrations will benefitfrom productivity gains, increased flexibility, cost savings. For the general public,

pollution levels, traffic congestion and energy consumption will be reduced. Foremployees, more flexible working arrangements will be particularly beneficial for all

those tied to the home, and for people in remote locations the narrowing of distances willhelp cohesion.

Issues to watch? Problems arising from decreased opportunities for social contact andpromotion will have to be addressed. Impact on labour legislation and social security

provision will need to be assessed.

What target? Create pilot teleworking centres in 20 cities by end 1995 involving at least

20,000 workers. The aim is for 2% of white collar workers to be teleworkers by 1996; 10million teleworking jobs by the year 2000.

AApppplliiccaattiioonn TTwwoo -- DDIISSTTAANNCCEE LLEEAARRNNIINNGG

Life long learning for a changing society

What should be done? Promote distance learning centres providing courseware, trainingand tuition services tailored for SMEs, large companies and public administrations.

Extend advanced distance learning techniques into schools and colleges.

Who will do it? Given the required network tariffs at competitive prices, industry will set

up new service provider companies to supply distance learning services for vocationaltraining. European Commission should support quality standards for programmes and

courses and help create a favourable environment. Private sector providers and publicauthorities will enter the distance education market, offering networked and CD-I and

CD-ROM interactive disk based programming and content at affordable prices.

Who gains? Industry (specially SMEs) and public administrations, by cost reductions and

optimisation of the use of scarce training and education resources. Employees needing toupgrade their skills by taking advantage of lifelong learning programmes. People tied to

the home and in remote locations. Students accessing higher quality teaching.

Issues to Watch? Need to engage in a major effort to train the trainers and expand

computer literacy among the teaching profession.

- 24 -

What target? Pilot projects in at least 5 countries by 1995. Distance learning in use by

10% of SMEs and public administrations by 1996. Awareness campaigns among theprofessional associations and education authorities.

AApppplliiccaattiioonn TThhrreeee -- AA NNEETTWWOORRKK FFOORR UUNNIIVVEERRSSIITTIIEESS AANNDD RREESSEEAARRCCHH CCEENNTTRREESS

Networking Europe's brain power

What should be done? Development of a trans-European advanced network (highbandwidth, high definition, carrying interactive multimedia services) linking universities

and research centres across Europe, with open access to their libraries.

Who will do it? Providing broadband networks and high speed lines are available at

competitive rates, universities and research centres will set up the networks. Privatecompanies, large and small, could also link their laboratories with universities and

research centres. A trans-European public library network can also be envisaged.

Who gains? The productivity of research programmes through broader team creation

leading to synergies between institutions. Society in general through more efficientdiffusion of research findings and knowledge.

Issues to watch? Giving due consideration to IPR protection as the accumulated stock ofhuman knowledge becomes more readily accessible.

What target? Thirty per cent of European universities and research centres linked throughadvanced communications networks by 1997. Extension to other European countries as

this becomes technologically feasible.

AApppplliiccaattiioonn FFoouurr -- TTEELLEEMMAATTIICC SSEERRVVIICCEESS FFOORR SSMMEEss

Relaunching a main engine for growth and employment in Europe

What should be done? Promote the widest possible use of telematic services (E-mail, file

transfer, EDI, video conferencing, distance learning, etc.) by European SMEs, with linksto public authorities, trade associations, customers and suppliers. Raise the awareness of

addedvalue services, and communications in general, among SMEs. Increase access totrans-European data networks.

Who will do it? If the necessary ISDN networks are available at competitive rates, theprivate sector will provide trans-European value-added services tailored for SMEs. Local

government, Chambers of Commerce and trades associations linking SMEs will mountprogrammes for integrating information networks at the localand regional level,

promoting awareness campaigns for the services available.

Who gains? SMEs will be able to compete on a more equal basis with larger companies

and captive contractor-supplier relationships will be weakened. They will be morecompetitive, will grow faster and create more jobs. Relationships with administrations

will be simpler and more productive. The category will gain in public standing andinfluence.

- 25 -

What target? Access to Trans-European telematic services for SMEs available by end

1994-1995. 40% of SMEs (firms with more than 50 employees) using telematic networksby 1996. SME links with administration networks prioritised.

AApppplliiccaattiioonn FFiivvee -- RROOAADD TTRRAAFFFFIICC MMAANNAAGGEEMMEENNTT

Electronic roads for better quality of life

What should be done? Establish telematic solutions on a European scale for advancedroad traffic management systems and other transport services (driver information, route

guidance, fleet management, road pricing, etc.).

Who will do it? European, national and regional administrations, user groups and traffic

operators will create a Steering Committee and define a common open systemarchitecture for advanced telematic services with common user interfaces.

Who gains? Drivers, local communities (especially in heavily congested areas) andindustry will benefit from reduction in traffic, increased road safety, lower environmental

costs, energy and time saving.

What target? Implementation of telematic systems for road traffic management in 10

metropolitan areas and 2,000 km of motorway by 1996. 30 metropolitan areas and thetrans-European motorway network by the year 2000.

AApppplliiccaattiioonn SSiixx -- AAIIRR TTRRAAFFFFIICC CCOONNTTRROOLL

An electronic airway for Europe

What should be done? Create a European Air Traffic Communication System providingground-ground connections between all European Air Traffic control centres (ATC) and

air-ground connections between aeroplanes, ATC-centres across the European Union andthe European Civil Aviation Conference, with the aim of achieving a unified trans-

European air traffic control system.

Who will do it? The European Council should promote energetically the creation of a

reduced number of networked European Air Traffic centres, as defined byEUROCONTROL.

Who gains? The European air transport industry - and its millions of passengers - willbenefit from better air traffic management and significantly reduced energy consumption.

A safer system, with less congestion and subsequent reductions in time wasted, noise andfume pollution.

Issues to watch? There is a need to co-ordinate closely with the defence sector.

What target? Set up a Steering Committee with representatives of public authorities, civil

and military aviation authorities, the air transport industry and unions byend 1994.Definition of standards for communication procedures and the exchange of data and

voice messages between ATC-centres as well as between ATC-centres and aeroplanes.

A functioning trans-European system before the year 2000.

- 26 -

AApppplliiccaattiioonn SSeevveenn -- HHEEAALLTTHHCCAARREE NNEETTWWOORRKKSS

Less costly and more effective healthcare systems for Europe's citizens

What should be done? Create a direct communication "network of networks" based on

common standards linking general practitioners, hospitals and social centres on aEuropean scale.

Who will do it? The private sector, insurance companies, medical associations andMember State healthcare systems, with the European Union promoting standards and

portable applications. Once telecom operators make available the required networks atreduced rates, the private sector will create competitively priced services at a European

level, boosting the productivity and cost-effectiveness of the whole healthcare sector.

Who gains? Citizens as patients will benefit from a substantial improvement in healthcare

(improvement in diagnosis through on-line access to European specialists, on-linereservation of analysis and hospital services by practitioners extended on European scale,

transplant matching, etc.). Tax payers and public administrations will benefit from tightercost control and cost savings in healthcare spending and a speeding up of reimbursement

procedures.

Issues to watch? Privacy and the confidentiality of medical records will need to be

safeguarded.

What target? Major private sector health care providers linked on a European scale. First

level implementation of networks in Member States linking general practitioners,specialists and hospitals at a regional and national level by end 1995.

AApppplliiccaattiioonn EEiigghhtt -- EELLEECCTTRROONNIICC TTEENNDDEERRIINNGG

More effective administration at lower cost

What should be done? Introduction of electronic procedures for public procurementbetween public administrations and suppliers in Europe followed by the creation of a

European Electronic Tendering Network. This programme will function as a strongenabling mechanism for attaining critical mass in the telematic services market in

Europe.

Who will do it? European Council and Member States decide to agree on common

standards and to introduce a mandatory commitment to electronic handling ofinformation, bidding and payments related to public procurement. Telecom operators and

service providers will enableusers to access to the European Electronic TenderingNetwork.

Who gains? PublicAdministrations will benefit from cost savings in replacing paperhandling with electronic handling and from the more competitive environment between

suppliers drawn from the wider internal market. Small and medium sized enterprises willbenefit from participating in trans-European public procurement and from the diffusion

of telematic services.

Issues to watch? Data security, the need to ensure open access particularly for SMEs, to

avoid electronic procurement developing into a hidden form of protectionism. Take

- 27 -

proper account of similar programmes developed in third countries, particularly the US

(CALS).

What target? A critical mass of 10% of awarding authorities using electronic procedures

for their procurement needs could be attained in the next two to three years.

AApppplliiccaattiioonn NNiinnee -- TTRRAANNSS--EEUURROOPPEEAANN PPUUBBLLIICC AADDMMIINNIISSTTRRAATTIIOONN NNEETTWWOORRKK

Better government, cheaper government

What should be done? Interconnected networks between Public Administrations

networks in Europe, aiming at providing an effective and less expensive (replacement ofpaper by electronic means) information interchange. Subsequently extended to link

public administrations and European citizens.

Who will do it? European Union and Member States should strengthen and speed up the

implementation of the programme for Interchange of Data between Administrations(IDA). The private sector will increase its co-operation with the European Union and

Member States in defining technical solutions for the provision of interoperable servicesand interconnectable networks, while supporting national and local authorities in the

testing and implementation of networks and services for citizens.

Who gains? The unification process for the single market, with general benefits in lower

costs and better relations between public administrations and European citizens.

What target? Implementation of interconnected networks allowing interchange in the tax,

customs and excise, statistical, socialsecurity, health care domains, etc., by 1995-96.

AApppplliiccaattiioonn TTeenn -- CCIITTYY IINNFFOORRMMAATTIIOONN HHIIGGHHWWAAYYSS

Bringing the information society into the home

What should be done? Set up networks providing households with a network access

system and the means of using on-line multimedia and entertainment services on a local,regional, and national and international basis.

Who will do it? Groups of content and service providers (broadcasters, publishers),network operators (telecoms organisations, cable), system suppliers/integrators (e.g.

consumer electronic industry). Local and regional authorities, citizens groups, chambersof commerce and industry, will have very important roles to play.

Who gains? Consumers will enjoy early experience of complex new services, particularymultimedia services, and will be able to express their preferences in the fields of

entertainment (video on demand), transaction-oriented services (banking, home shoppingetc.) as well as gaining access to information services and teleworking or telelearning.

Public authorities will gain experience with issues such as privacy, IPR protection,standardisation which will be helpful in defining a single legal and regulatory

environment.

- 28 -

Private sector participants will gain early hands-on experience of consumer preferences

for programmes, software and services. User interfaces can be tested and improved inpractice.

What target? Install and operate in up to five European cities with up to 40,000households per city by 1997.

CChhaapptteerr 55

FFiinnaanncciinngg tthhee iinnffoorrmmaattiioonn ssoocciieettyy -- aa ttaasskk ffoorr tthhee pprriivvaattee sseeccttoorr

It is neither possible nor necessary at this stage to be precise about the amount of

investment that will be generated by the development of the information infrastructureand related services and applications. Analyses made of the US market remain highly

questionable, although there is no doubt that the total investment required over the next 5to 10 years will be considerable. The Group believes the creation of the information

society in Europe should be entrusted to the private sector and to market forces.

The Group believes the creation of the information society in Europe should be entrusted

to the private sector and to market forces. Private capital will be available to fund newtelecoms services and infrastructures providing that the different elements of this Report's

Action Plan are implemented so that:

� market liberalisation is fast and credible

� rules for interoperability and reciprocal access are set

� tariffs are adjusted

� the regulatory framework is established

There will be no need for public subsidies, because sufficient confidence will have been

established to attract the required investment from private sources.

Ultimately, it is market growth that is perceived as the real guarantee for private

investors, rendering subsidies and monopolies superfluous.

Public investment will assume a role, but not by any increase in the general level of

public spending - rather by a refocusing of existing expenditure. Indeed, some of theinvestment that public authorities will have to undertake to develop applications in areas

of their own responsibility will generate productivity gains and an improvement in thequality of services that should, if properly handled, lead to savings.

In addition to some refocusing of expenditure on R&D, modest amounts of public moneymay also be useful to support awareness campaigns mainly directed at small and medium

sized businesses and individual consumers.

The Group recommends refocusing existing public funding more specifically to target the

requirements of the information society. At the Union level, this may require somereorientation of current allocations under such headings as the Fourth Framework

Programme for research and development and the Structural Funds.

- 29 -

The same is true for expenditure at the European Union which can achieve important

results by a better focusing of existing resources, including finance available under boththe Fourth Framework Programme funding R&D, and under the Structural Funds.

The Commission has also proposed limited support for some of the services andapplications included in the Group's Action Plan from funds linked to the promotion of

trans-European networks. These proposals deserve support.

CChhaapptteerr 66

FFoollllooww--uupp

With this Report the Group has completed its mandate and provided recommendationsfor action. Our recommendations should be regarded as a coherent whole, the full

benefits of which can only be reaped if action is taken in all areas.

Given the urgency and importance of the tasks ahead, the Group believes that at Union

level there must be one Council capable of dealing with the full range of issues associatedwith the information society. With this in mind, each Member States may wish to

nominate a single minister to represent it in a Council of Ministers dedicated to theinformation society. The Commission should act similarly.

The Group calls for the establishment by the Commission of a Board composed ofeminent figures from all sectors concerned, including the social partners, to work on the

framework for implementing the information society and to promote public awareness ofits opportunities and challenges. This Board should report at regular intervals to the

institutions of the Union on progress made on the implementation of therecommendations contained in this report.

AAnn AAccttiioonn PPllaann -- ssuummmmaarryy ooff rreeccoommmmeennddaattiioonnss

RReegguullaattoorryy FFrraammeewwoorrkk

Evolving the regulatory domain

Member States should accelerate the ongoing process of liberalisation of the Telecomsector by: opening up to competition infrastructures and services still in the monopoly

area removing non-commercial political burdens and budgetary constraints imposed ontelecommunications operators setting clear timetables and deadlines for the

implementation of practical measures to achieve these goals.

An authority should be established at European level whose terms of reference will

require prompt attention.

Interconnection and Interoperability

Interconnection of networks and interoperability of services and applications should be

primary Union objectives. The European standardisation process should be reviewed inorder to increase its speed and responsiveness to markets.

- 30 -

Tariffs

As a matter of urgency the international, long distance and leased line tariffs should be

adjusted to bring these down into line with rates practised in other advancedindustrialised regions. The adjustment should be accompanied by the fair sharing of

public service obligations among operators.

Critical Mass

Public awareness should be promoted. Particular attention should be paid to the small and

medium-sized business sector, public administrations and the younger generation.

Worldwide Dimension

The openness of the European market should find its counterpart in markets and networks

of other regions of the world. It is of paramount importance for Europe that adequatesteps should be taken to guarantee equal access.

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The Information Society is global. Union action should aim to establish a common andagreed regulatory framework for the protection of intellectual property rights, privacy and

security of information in Europe and, where appropriate, internationally.

IPRs

Intellectual property protection must rise to the new challenges of globalisation and

multimedia, and must continue to have a high priority at both European and internationallevels.

Privacy

Without the legal security of a Union-wide approach, lack of consumer confidence willcertainly undermine the rapid development of the information society. Given the

importance and sensitivity of the privacy issue, a fast decision from Member States isrequired on the Commission's proposed Directive setting out general principles of data

protection.

Electronic protection, legal protection and security

Work at the European level on electronic and legal protection as well as security should

be accelerated.

Media ownership

Urgent attention should be given to the question of how we can avoid divergent national

legislation on media ownership undermining the internal market. Effective rules mustemerge to protect pluralism and competition.

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Competition

Competition is a key element in Europe's strategy. The application of competition rules

should reflect the reality of the newly emerging global markets and the speed of changein the environment.

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Networks

Priority has to be given to the extension of the availability of EURO-ISDN, in line withcurrent Commission proposals, and reductionsin tariffs to foster the market.

The Council should support the implementation of the European BroadbandInfrastructure and secure its interconnectivity with the whole of European telecom, cable

television and satellite networks.

A European Broadband Steering Committee involving all relevant actors should be set up

in order to develop a common vision and to monitor and facilitate the realisation of theoverall concept through, in particular, demonstrations, and choice and definition of

standards.

With regard to mobile and satellite communications :

� tariffs for mobile communications should be reduced

� GSM should be promoted in Europe and internationally

� a regulatory framework for satellite communications should be established

� the European satellite industry should be urged to develop common priority projects

and to participate actively in the

� development of world-wide systems.

Basic services

The provision and widespread use of standard trans-European basic services, includingelectronic mail, file transfer, video services, should be promoted by urgent and coherent

action at both the European and Member State levels.

The Commission should initiate the creation of a " European Basic Services Forum" to

accelerate the availability of unified standards for basic services.

Applications

Initiatives in the application domain are the most effective means of addressing the slow

take-off of demand and supply. They have a demonstration function which would helppromoting their use. The Group has identified the following initiatives :

� Teleworking

� Distance learning

� University and research networks

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� Telematic services for SMEs

� Road traffic management

� Air traffic control

� Health care networks

� Electronic tendering

� Trans-European public administration network

� City information highways

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The creation of the information society should be entrusted to the private sector and tothe market forces. The existing public funding should be refocused more specifically to

target the requirements of the information society. At the Union level, this may requiresome reorientation of current allocations under such headings as the Fourth Framework

Programme for research and development and the Structural Funds.

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Given the urgency and importance of the tasks ahead, there must be, at Union level, one

Council capable of dealing with the full range of issues associated with the informationsociety. With this in mind, each Member State may wish to nominate a single minister to

represent it in a Council of Ministers dedicated to the information society. TheCommission should act similarly. A Board composed of eminent figures from all sectors

concerned, including the social partners, should be established by the Commission towork on the framework for implementing the information society and to promote public

awareness of its opportunities and challenges. This Board should report at regularintervals to the institutions of the Union on progress made on the implementation of the

recommendations contained in this Report.